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  • New Evidence Reveals Vast Powers of Consumer Finance Bureau

    Tucked into the 232 pages of the May 31 Federal Register—the daily catalog of new regulation—was glaring evidence that the newly created Consumer Financial Protection Bureau (CFPB) will exercise nearly unlimited power over how Americans obtain credit and loans and manage their money. That it will do so absent accountability to Congress or virtually anyone else is an invitation to regulatory overkill.

    Creation of the bureau was among the hundreds of new financing constraints imposed by the Dodd–Frank statute. It will assume policymaking and enforcement powers over credit cards, mortgages, and a host of other consumer financial products and services, exceeding the authority previously wielded by seven federal agencies. In preparation for the formal transfer of control, the Treasury Department on Tuesday published a list of 32 major rules and orders that the CFPB will administer (in whole or in part) as of July 21. These include:

    • Regulating services provided by automated teller machines, bill payments by phone, and point-of-sale terminal transfers in stores, including rules on the type of receipts that must be issued and procedures for resolving disputes;
    • Supervising retail sales made via mail, telephone, fax, or the Internet, including how merchandise is advertised and how it must be shipped;
    • Collecting data from banks, credit unions, mortgage lenders, and others to ensure that lending practices are “fair” to local communities;
    • Regulating the terms and conditions of credit cards, mortgages, leasing, franchising, and other financial services; and
    • Overseeing communications between developers and prospective buyers and homeowners, including the various types of printed materials that must be distributed based on the number of lots in a subdivision, and including property restrictions and descriptions of climate and topography.

    That’s a very tall order for any single agency. And concern about the bureau’s reach is reinforced by the vague language of its statutory mandate. The CFPB It is empowered to punish “unfair, deceptive, and abusive” business practices. While unfair and deceptive have been defined in other regulatory contexts, the term abusive is largely undefined, granting bureau officials inordinate discretion.

    Moreover, the CFPB’s status within the Federal Reserve, as well as the director’s fixed term of five years, effectively preclude presidential oversight, while even the Fed is statutorily prohibited from “intervening” in bureau affairs.

    Nor will Congress have control via the purse strings: Bureau funding is set by law at a fixed percentage of the Fed’s operating budget.

    The CFPB can be overruled only by the Financial Stability Oversight Council (composed of representatives from eight other financial regulatory agencies). However, even the council’s oversight authority is narrowly confined by statute.

    Legislation to tame the CFPB is pending in the House, but, although well-intended, it falls short of the necessary curbs. It is far better for Congress to rein in the CFPB before it formally assumes its excessive powers next month than to try and do so after the damage is done.

    Posted in Economics [slideshow_deploy]

    24 Responses to New Evidence Reveals Vast Powers of Consumer Finance Bureau



    2. Diana Brown says:

      There is just too much regulation and government intervention. They need to stay out of our lives. We are losing our liberties a piece at a time. When will this stop. Enough is enough!!!!

    3. Roberta Guagliado says:

      This is only one of O'Bama's regulatory nightmares to effectively handcuff the

      economy of the United States. Everything is behind the scenes until it's ready

      to become the law of the land. When everything tumbles, he will declare himself king for life! This administration is evil and people better start taking notice.

    4. Chasoo says:

      All I have to say is, if Obama wins re-election we won't recognize our country by 2016 and by then he'll have the system set up in a way that he'll be our President beyond 2016…

    5. Tim AZ says:

      This is just another example of the regime and their allies in the congress and the senate transferring power from the peoples elected representatives to unelected bureaucrats that answer to the regime without being accountable to the American citizenry. The good news is that since congress created this monster they can eliminate it if they choose to be relevant once again. The old toads will certainly find that collecting pay and the worlds best health insurance along with an excellent retirement where the only requirement of them is maintain the illusion of relevance and attending cocktail parties nightly is just too easy to give up. So it is up to the people to insure that the old toads are removed from all elected offices long before they become comfortable being empty suites. A frequent turnover is the only way to ensure that the congress and senate will choose to be relevant once again while serving the will of the people. Had enough yet?

    6. Mike, Wichita Falls says:

      My goodness! As if our elected officials are not far enough removed from we the people, sending canned email/letter responses and staffers to distract us, they write laws that further remove accountability. On election day, they can say, "Don't blame me, blame that bureaucrat!"

      GOP Presidential hopefuls can and should make repeal of the Dodd-Frank law a gold-plated plank in their platform along with the repeal of Obamacare. Anyone of them that says that they want repeal bills on their desk as soon as they take the oath of office will go far if not all the way to that same desk. Somedays I feel that if they did nothing else in their term, these would be enough.

    7. O_Henry says:

      What governmental “drift” to permit agencies to impose “regulations” on the citizenry! According to the US Constitution citizens are to be subject to laws made by bills and legislators, not governmental agency policies (nor are provisions made in the Constitution for judges to legislate from the bench) unaccountable to the electorate.

      The citizenry of USA need to vote "constructionists" into office: people by definition interested in returning to the form of government described in our Constitution. Short of this, the USA might as well be another marginally free and economically depressed (in short – miserable) country/state of the European Union.

    8. DHarper, Lubbock, Tx says:

      We don't have the capability of understanding or knowing how to control an ant colony, yet these Progressive technocrats like Obama think they are smart enough to structure our whole human society. It is madness!

    9. Haywood , Ga says:

      So the Franken-Dodd scam if coming to life now. How long before th public comes after the monster?

    10. Haywood , Ga says:

      So the Franken-Dodd scam if coming to life now. How long before the public comes after the monster?

    11. Leon Lundquist, Dura says:

      Tame it? Tame it? This is catching the Administration Red Handed in Unconstitutional Dictatorship! This Crazy Agency is an Impeachable High Crime! Tame it? Gee whiz! Dian Katz wrote a brilliant article, God love Heritage Foundation! I am sure I would go mad without it! But this is so much worse a situation than we have been allowed to believe! These guys actually want to destroy America! Yes, Bankruptcy is part of the word Destroy. Here it is! In plain sight! (Again!) And the finest Think Tank in American can't CALL IT? The Consumer Financial Protection Bureau is an Element of the New Totalitarian America!

      I don't have the money to do the Legal Research on it, but where have I gone wrong? We TEA Party people are Victim Witnesses to the Progressive Agenda! See? You can't hide the Crime from the Victims! We are mad as Hell to see our beautiful America go down! Like any of Obama's Shadow Government Agencies, the ruling principle of the new Consumer Finance Protection Bureau is Noblesse Oblige! Hey! We have to pay for this! There is a very bright 'bright line' to be made here, Dictatorships of ANY kind are Unconstitutional!

      So let me ask HF this: Where will our Representatives get the Courage they will need to Prosecute the villians if Heritage Foundation can't even call it? The Constitution says clearly it is unlawful to create any other kind of Government except what is specifically mandated, i.e., Representative Constitutional Democracy! This? It is Treason. Really!

    12. Vince Ft Myers Fl says:

      This agency will be among the most powerful in the govt and not accountable to any normal powers. It would have our founders spinning in their resting place to think Congress delagted this much power to an unelected agency. under the guise of being 'pro consumer' it is a terrible infringement on borrowers, lenders and business in general – all dictated by a single person. It is an awful idea and should be eliminated at once, What has happened to a 'free' America???

    13. Laura says:

      Frank-Dodd set this up? Does that tell the people in Washington anything. Stop the maddness!

    14. Toowoozy says:

      Yeah, and lets go back to de-regulation because that went so well. Agreed that government should have very limited ability in compromising our liberty – but it is not government you need to worry about (but we always should), it is big business that you should fear. Big business intrudes on your personal liberties far worse then government, and it is big business that lobby's governments to enact laws that allows corporations to be more intrusive, and controlling of your freedoms.

    15. George Colgrove, VA says:

      2006 – the American voter saw that the Republicans were big spenders – so we threw them out.

      2008 – The American voters continued to see republicans as big spenders – so we threw them out even more. Americans started to coin themselves the Tea Party – no particular singular movement – but a state of mind.

      2010 – The American voters saw Democrats as vial big spenders and dangerous regulators so we threw them out in a big way. Tea Party victories numbered in the hundreds – nationwide

      2011 – The American Voter has had enough. We have been speaking out against this government now for 5 years and we are not being heard. We have greater taxation, more regulation, and a deeper debt. Tea Party is bigger and louder than ever. We are not being placated nor are we going to sleep. For every loud Tea Party memeber there are droves of quiet Tea Party voters eager for November 2012.

      2012 – The American voter will see the entire federal government as dangerously incompetent and will vote for people who will overhaul – not the constitution (that still works) – but the DC bloat and bureaucracy. The federal government is NOT WORKING, NOT LISTENING and NOT DOING WHAT WE ARE TELLING THEM TO DO! In 2012, congress and thereby the entire federal government will look a lot different. As each day passes the odds of a massive immediate reduction of the size/scope and cost of governemnt increases. As each day passes the odds of departments being eliminate increases.

      Democrats – when we voted for Hope and Change – we wanted that in smaller government!

      The country will not change – DC will!

      The problems we are having today is not the cause of the American citizen – we have been fighting for the country in every election. The blame sets in the White House from 2001 on up; in every seat of congress 2001 on up and in every GS13 federal worker on up in every program office who bloated their individual budgets and hired people when no funds were available from 2001 on up.

      We had a balanced budget in 2001 when the GOP actually was concerned about the future of this country and not how fat their wallets and pocketbooks were. Then the cost of living and conducting business was cheap compared to today. Today when it seems so darned obvious that spending needs to be dramatically reduced, these goons – all of them – are trying to sqeeze out just one more year of stupidity.

      End the massive regualtions and the massive spending. It is out of control!

    16. Stirling, Pennsylvan says:

      The CFPB is annother one of those progressive plans to destroy the system from the inside. It seems like most of them are like "Termites" that are put into the system and just eat the Freedoms of the consitution till there is nothing left. When the Congress (made up of elected officials) have no control to remove these cancerous government regulations then our voices mean nothing.

      No government agency should be imune from removal if needed. I assume the goal of the CFPB was to create something that couldn't be removed as Obamacare was designed as well.

    17. SRD, GA says:

      It seems to me that since the CFPB is funded by a semi private organization (The Fed) and is immune from oversight by the Congress or President, it is in fact a private organization. I can not see how any regulations issued by the CFPB could be legally enforced. It would be like asking the American Bankers Association to regulate the financial system.

      Governments across the country use private companies to enforce ordinances(Parking, Code enforcement, Speeding cameras, etc.), but the rules, laws and ordinances are put on the books through the appropriate legislature. The enforcement contractor does not make the law and is under the supervision of the government and courts.

    18. Wildcat from Dallast says:

      Just one more idiotic thing to repeal in January 2013!

    19. Bobbie says:

      The American government has declared war on American freedom and all Americans who live it!



    20. Pingback: This’n’That; June Sixth #1; Loss Of Control « Justincase505's Blog

    21. Tom Berquist, Pennsy says:

      The Financial Reform law is as dangerous to our country as ObamaCare. These two pieces alone will bring down our economy which is the intent of this administration.

    22. Dana, California says:

      I'm completely astounded at how much damage Obama has been able to do to our society in less than 3 years. Are we truly stupid enough to blindly accept this, or will we fight? I say fight!!! I have only sycophants "representing" me in Congress; i.e. Eshoo (lapdog of Pelosi) in the House, and Boxer and Feinstein in the Senate. I feel totally helpless so must depend on the protests of those of you who have real congressional representation. I've worn out my Protest Pen only to get replies offering figurative pats on the head telling me they (The Sycophants) know better! I no longer even bother to contact any of the Three. Please, protest to your reps on my behalf and on the behalf of future generations.

    23. Thomas, South Caroli says:

      Why are two of the people most resonsible for the worst financial mess in US History writing new legislation that puts power beyond the hands of the Congress. This is UNCONSTITUTIONAL and it is CRIMINAL! We are letting these people do this to us!

    24. Larry White, Palm Co says:

      "…Bureaucratic Despotism is more dangerous than socialism." and The CFPB is another nail in the coffin of Capitalism.

      Rules are not Laws.

      Regulators are not Elected Representatives.

      We, the People, have been overwhelmed by the Obama Administrations' huge growth in the volume of csars, regulators and bureaucrats.

      Heritage, Please help us stop this loss of our freedoms.

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